Whether an increase in
high-deductible health insurance policies has led to fewer
follow-up visits when health problems.

Cumulative changes the past five years have caused
many small physician practices to consider joining larger
physician organizations, medical groups or seek employment
with hospitals.

Michael Williams, M.D., said his medical group has seen growth in patients and revenue under the Patient Protection and Affordable Care Act of 2010.

But — like many physician groups — Williams' practice also has had to deal with increased regulations and compliance costs that have forced the group to improve efficiencies to maintain profit margins.

"Our group is seeing more patients, and we have hired advanced practitioners to alleviate the backlog," said Williams, who is an internist with Arcturus Healthcare PLC, a 41-physician primary care group with about seven advanced practice nurses in Rochester Hills.

"Being a larger practice, we have shared administrative costs and reduced our expenses," said Williams, who also is CEO of United Physicians, the region's largest physician organization with 3,400 affiliated physicians.

"We have widened our margins more by lowering our expenses through efficiency and using our quality team to increase financial incentives than by just adding patients," Williams said of Arcturus.

Since Obamacare, the movement to preventive medicine has been the biggest positive for physician practices and patients, said Ewa Matuszewski, CEO of MedNetOne Health Solutions, a Rochester-based physician organization with more than 1,000 physicians.

"Prevention is almost a mandate. People are willing to come in for annual physicals, and immunization rates are steadily improving," Matuszewski said.

At Henry Ford Medical Group, CEO William Conway, M.D., said the Affordable Care Act's health insurance expansion provisions have created historic growth at the 1,100-physician group.

"Across all payer categories, we are having the best three-year run in 20 to 30 years" with 11 percent revenue growth and a slightly lower percentage of patient volume increases, said Conway, noting about 50 percent of the growth is newly insured patients and the other half market-share gains.

"Much of (growth) is related to high-end services," he said. "We have worked very hard and are committed to growth."

Now in its sixth year, the Affordable Care Act was opposed by nearly 60 percent of physicians even though organized medicine groups like the American Medical Association threw their support behind it.

Physicians opposed to it objected to a variety of provisions, including a variety of personal and industry taxes to pay for the bill, the individual mandate that required most of the population to purchase a private insurance policy or pay a fine and the still-inactive Independent Payment Advisory Board that was tasked with reducing Medicare costs without jeopardizing quality.

But as health care cost increases have dropped to historic lows of under 4 percent and Medicaid and private insurance expansion allowed 20 million patients to seek medical care, physician opposition has declined somewhat.

By 2015, a Kaiser Family Foundation survey of physicians showed a slight decline in doctors viewing Obamacare as unfavorable — 52 percent, compared with 48 percent of doctors who favored it.

But by political party affiliation, physicians showed vastly different preferences. For example, 87 percent of physicians who said they are Democrats favor Obamacare, while 87 percent who said they are Republicans have an unfavorable view.

Still, besides Obamacare, the HITECH Act in 2009 that provided billions of dollars to stimulate adoption of electronic health records, and Medicare and private insurance company reimbursement changes that favor paying for quality, have forced changes at physician practices and in how care is delivered.

While EHR systems continue to increase costs for practices, more physicians are effectively using data to focus on prevention, improve quality and conduct population health reviews on patients.

Patient visits changing

Despite having an increase in patient volume, Williams said, physicians are seeing a troubling trend where some patients can't afford ongoing care for chronic problems because of out-of-pocket costs.

"On the commercial side, we are seeing a significant increase in collection burden passed because of the high-deductible insurances," Williams said. "Patients come in for benefits defined under essential benefits: preventive, mammograms, that is good. But the chronically sick, if they are paying the first $3,500, it's a big pill, and they don't come in as frequently."

Williams said when deductibles were lower, physicians saw more patients come in for follow-up visits.

"People are at significant risk, are in poorer health, doctors are seeing that," said Williams.

Conway said Henry Ford has seen an uptick in bad debt and problems paying for medications as patients have switched to higher-deductible health plans, but he hasn't seen problems with patients not able to afford follow-up visits.

"We have switched from struggling with (charity care) to bad debt," said Conway, who added the system tries to work out solutions for patients who can't pay.

Rodger Prong, executive director of Waterford Township-based Oakland Physicians Network Services with 450 physicians in 212 practices, said many new patients have pent-up demand from not seeking care for extended periods.

"This has resulted in more time being spent and more tests and procedures being ordered," Prong said. "Our visits have been increasing, and there has been a trend toward more preventive care."

Collection problems have increased for many practices because of higher-deductible plans, Prong said. "More of the cost of care is resting on the shoulders of the patients."

Conway said initial patient visits for new patients are running much longer than standard practice.

"Initially with insurance expansion, first visits required more time because many patients were coming in with multiple unmanaged conditions, requiring prescription plans, among other things," Conway said.

"Lately, that phenomenon has reduced somewhat. Now the time increase is predominantly caused by Medicare patients coming in for their annual free prevention screenings, intended to address preventive services," he said.

But Conway said Medicare patients bring in a long list of health complaints. "They are using these visits to avoid a copay or deductible charge that might otherwise apply," he said.

Larger groups are benefiting more under Obamacare than smaller groups because they have the financial resources and support staff, Prong said.

"Physicians in small practices have actually seen drops in procedures since the ACA and tend to be negative about it," Prong said.

"Their business model is still viable, but net margins are decreasing because revenue is declining," Hai said. "They are working just as hard, maybe harder, but not making more money because reimbursement is less."

Some smaller practices are still hitting revenue targets, but primarily because they receive financial incentives from medical homes, share revenue from Medicare accountable-care organizations and participate in other quality-improvement programs, Hai said.

Another technique practices are using to manage larger patient populations is adding advanced practitioners and nurse case managers. Hiring more advanced-practice nurses has been a necessity to help manage higher numbers of patients and more patients with chronic diseases, said Daniel Passerman, D.O., physician in charge of Henry Ford's Harbortown and Detroit Northwest medical centers.

"I have had more patients, more Medicaid patients" come into the clinics, said Passerman, who also is osteopathic family medicine program director at Henry Ford Wyandotte Hospital.

"I had a patient several years ago who (stopped coming) because he had lost his insurance. He had significant chronic disease," said Passerman. "When ACA came into play, (he obtained Medicaid coverage and) found me. I am his doctor again. It is nice to see those patients."

While some doctors bemoan faulty EHRs, Passerman said, Henry Ford's Epic Corp. electronic medical record system has let physicians increase the number of patients they see or take care of each day.

Lisa Keane, president, WSU Physician Group

Iltefat Hamzavi, M.D., vice president with Hamzavi Dermatology/Dermatology Specialists, said the patient volume began to increase when the Obamacare rule that allowed parents to keep their children on their health plan until age 26 went into effect in 2011.

Lisa Keane, president of Wayne State University Physician Group, said Obamacare has less of an impact on faculty practice plans like UPG. "We take care of patients regardless of their ability to pay," she said.

Still, Keane said UPG has seen a slight uptick in patient visits due to Obamacare insurance expansion.

"It is not as noticeable here because we started out with a larger number of Medicaid patients," she said.

Accountable care

One of Obamacare's more successful pilot programs has been accountable-care organizations. More than 12 ACOs — groups of hospitals, doctors and other providers that coordinate care — have been formed in Michigan to cover 300,000 Medicare patients.

All ACOs in Michigan have saved Medicare money and more than half improved quality enough and reduced costs to share in the savings, earning the hospitals and physicians $50 million last year, according to the Centers for Medicare and Medicaid Services. ACOs nationally saved Medicare nearly $1 billion, returning $400 million to ACO owners.

Some 140 OPNS physicians formed Physicians Direct ACO LLC to take advantage of the program, Prong said.

"We were the third best with the lowest cost, but we didn't get anything out of it because we started with high quality numbers and low costs," Prong said. "We saved $1.3 million for Medicare, but we didn't hit the threshold for savings so we didn't share anything."

For this reason, Conway said, Henry Ford waited to jump on the ACO bandwagon until it felt Medicare had designed the correct model to fit its medical group. Earlier this year, the Henry Ford Physicians ACO was announced as part of Medicare's Next Generation ACO model.

"This ACO is very important for us," said Conway. "We had about about 50 percent of patients in our care in risk-based contracts. With another 25,000 (Medicare patients in the ACO). we now have 70 percent of our revenue through the door in risk contracts. This will transform our practice into a single model of care."

Beyond Obamacare

As Medicare continues to roll out new regulations and reimbursement policies, physicians are bracing for more change. Starting in 2018, Medicare will begin paying physicians under the Quality Payment Program, a new reimbursement formula for physicians that combines several existing quality programs.

"We've weathered the last five years pretty well, but the looming Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 has the potential to be far more tumultuous," Prong said.

Conway said Henry Ford hopes to qualify for the new reimbursement arrangement through its new ACO. "We have a large (management) staff, and it is so complicated. I don't know how smaller groups can manage," he said.

Keane said MACRA will affect UPG, but she said the group is uncertain exactly how. A UPG committee is studying the law to determine what track to fall under — the Merit-based Incentive Payment System or Advanced Alternative Payment Models.

"We have to make some choices," she said. "It is too soon to say how it will impact us."